\u3000\u3 China Vanke Co.Ltd(000002) 463 Wus Printed Circuit (Kunshan) Co.Ltd(002463) )
Event: the company disclosed its first quarter report on April 26, 2022. During the reporting period, the company achieved an operating revenue of 1.917 billion yuan, a year-on-year increase of 9.77%; The net profit was 250 million yuan, a year-on-year increase of 13.04%; The basic earnings per share is 0.13 yuan.
After years of deep cultivation in the industry, the profitability has been continuously improved: since its establishment, the company has been based on the R & D, design and production of printed circuit boards, focusing on the main industry of PCB. Its products take communication equipment, data center infrastructure and automotive electronics as the core application fields, supplemented by industrial equipment, semiconductor chip testing and other application fields. After nearly 30 years of market expansion and brand management, the company has conquered a number of advanced technologies at home and abroad, established a solid technical moat, and accumulated customer resource advantages in many fields. Now it has developed into one of the important brands in the printed circuit board industry. Its revenue and profit have increased steadily for many years, and its profitability has been continuously improved. According to the first quarter report, the gross profit margin of the company’s sales was 25.95%, with a year-on-year increase of 6.33%, and the earnings per share was 0.13 yuan, with a year-on-year increase of 11.9%.
The prospect of PCB industry is promising, and structural transformation creates new opportunities: according to the latest report of prismark, the PCB industry is expected to grow by 5.2% in 2022, and the output value of the global PCB industry will reach about US $101559 billion by 2026. The booming demand of 5g, AI, cloud, artificial intelligence, consumer electronics and new energy industries will continue to bring rapid development space to the PCB industry. PCB industry is developing in the direction of high precision, high density and high reliability to adapt to the development of downstream communication, server and data storage, new energy and intelligent driving, consumer electronics and other markets. According to the prismark Research Report, the output value of global PCB in server and data storage will increase by 10% in the next five years. The company continues to increase R & D investment and actively layout high-end products of communication, server and automobile. According to the company’s 2021 annual report, in the field of automotive electronics, the company has invested more resources in the evaluation and R & D of the reliability of automotive high-level HDI and anylayer technology; In the fields of communication, high-speed network equipment and data center, the driving force of value growth has gradually shifted from 5g wireless to high-speed network equipment and data center. A number of high-end server and switch products of the company have begun mass production.
Optimize the company’s business layout and deal with risks and challenges in many fields: the PCB industry is greatly affected by macroeconomic cyclical fluctuations. Since last year, the rise of raw material prices has driven the increase of PCB production costs. At the same time, the demand in the field of communication market is relatively weak, and the company’s operation is under certain pressure. In order to cope with market risks and challenges, the company further integrates production and management resources, accelerates the transfer of PCB products below the 16th floor of Qingsong factory and low-grade automobile PCB products of Huli micro electric to Huangshi factory, and expands production capacity based on the rich experience and efficient management ability of Huangshi factory management team, so as to meet customer needs and deal with price competition; Qingsong plant and Huli micro power will be upgraded by upgrading the bottleneck process, so as to improve the capacity utilization rate and good product rate.
Investment suggestion: we expect the company’s revenue from 2022 to 2024 to be 8.616 billion yuan, 10.273 billion yuan and 12.341 billion yuan respectively, and the net profit attributable to the parent company to be 1.328 billion yuan, 1.711 billion yuan and 2.004 billion yuan respectively. We give the “Buy-A” investment rating for the first time.
Risk warning: macroeconomic fluctuation risk; The risk of intensified industry competition; Raw material price fluctuation risk
